Supreme Court of the United States

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1 No. 134, Original IN THE Supreme Court of the United States STATE OF NEW JERSEY, Plaintiff, v. STATE OF DELAWARE, Defendant. On Exceptions to the Report of the Special Master REPLY BRIEF OF DELAWARE IN RESPONSE TO EXCEPTIONS BY NEW JERSEY TO THE REPORT OF THE SPECIAL MASTER JOSEPH R. BIDEN III Attorney General KEVIN P. MALONEY DELAWARE DEPARTMENT OF JUSTICE Carvel State Office Building Wilmington, DE (302) COLLINS J. SEITZ, JR. MATTHEW F. BOYER MAX B. WALTON RYAN P. NEWELL CONNOLLY BOVE LODGE & HUTZ LLP The Nemours Building 1007 N. Orange Street Suite 878 Wilmington, DE (302) Special Counsel to the State of Delaware DAVID C. FREDERICK Counsel of Record SCOTT H. ANGSTREICH SCOTT K. ATTAWAY PRIYA R. AIYAR KELLOGG, HUBER, HANSEN, TODD, EVANS & FIGEL, P.L.L.C M Street, N.W. Suite 400 Washington, D.C (202) Special Counsel to the State of Delaware September 28, 2007

2 QUESTIONS PRESENTED FOR REVIEW The State of Delaware supports the Special Master s recommendations. The State of New Jersey has filed three exceptions, which present the following questions: 1. Whether New Jersey s first exception should be overruled because Article VII of the 1905 Compact read in conjunction with Article VIII s reservation of territorial rights and this Court s cases disfavoring one State from having the power to make grants of another State s lands does not expressly concede to New Jersey the right to grant submerged lands located within Delaware. 2. Whether New Jersey s second and third exceptions should be overruled because riparian jurisdiction does not mean exclusive jurisdiction over wharves and other riparian structures, and because a State s exercise of jurisdiction over specific private property rights pertaining to riparian landowners is subordinate to the exercise of general police powers, such as Delaware s application of its coastal zone management laws.

3 iii TABLE OF CONTENTS Page QUESTIONS PRESENTED FOR REVIEW... i TABLE OF AUTHORITIES... vii GLOSSARY...xv INTRODUCTION...1 STATEMENT...2 A. The Long-Running Boundary Dispute New Jersey I: The fishing dispute The 1905 Compact New Jersey II...6 B. Jurisdiction Over Structures In Delaware Delaware s regulation of riparian uses Boundary-straddling structures within the twelve-mile circle New Jersey s acknowledgment of Delaware s regulatory authority The parties history of cooperation...13 C. The Present Controversy...13 SUMMARY OF ARGUMENT...16 ARGUMENT...18 I. THE MASTER CORRECTLY FOUND THAT NEW JERSEY MAY NOT GRANT DELAWARE LANDS...18 A. The 1905 Compact Codifies The Bedrock Principle That A Sovereign State Has Exclusive Jurisdiction To Grant Its Own Lands...18

4 iv B. Article VII Gives New Jersey No Right To Grant Delaware Lands...20 C. New Jersey s Exceptions Are Unpersuasive Virginia v. Maryland is inapposite New Jersey s symmetry arguments lack merit Article IX does not support New Jersey New Jersey s assumption that side means half of the river is flawed...27 II. DELAWARE MAY EXERCISE POLICE POWER JURISDICTION OVER RIPARIAN IMPROVEMENTS LOCATED IN DELA- WARE...29 A. Riparian Rights Are Subject To The State s Exercise Of Its Police Powers...30 B. Delaware Seeks To Exercise Its Police Powers...33 C. New Jersey s Exceptions Lack Merit Riparian is not exclusive jurisdiction Hudson County does not support New Jersey The right to wharf out does not include a right to unload any particular cargo Concurrent jurisdiction over wharves is administrable and rooted in the historical relations of the two States...41

5 v 5. The States conduct since 1905 supports Delaware s exercise of its police powers within Delaware...44 CONCLUSION...48 APPENDIX

6 CASES Federal vii TABLE OF AUTHORITIES Page Brooklyn Life Ins. Co. v. Dutcher, 95 U.S. 269 (1877)...46 Coffee v. Groover, 123 U.S. 1 (1887)...19, 20 Cummings v. City of Chicago, 188 U.S. 410 (1903)... 7, 33-34, 39, 43 Georgia v. South Carolina, 497 U.S. 376 (1990)...44 Head v. Amoskeag Mfg. Co., 113 U.S. 9 (1885)...7 Henderson Bridge Co. v. Henderson City, 173 U.S. 592 (1899)...42 Hudson County Water Co. v. McCarter, 209 U.S. 349 (1908)...33, 37, 38, 39 Huron Portland Cement Co. v. City of Detroit, 362 U.S. 440 (1960)...33, 35, 43 Illinois Central R.R. Co. v. Illinois, 146 U.S. 387 (1892)...40 Massachusetts v. New York, 271 U.S. 65 (1926)...19 New Jersey v. Delaware, 291 U.S. 361 (1934)...1, 2, 5, 6, 7, 15, 18, 20, 21, 27, 30, 38, 45, 46, 47 New Jersey v. New York, 523 U.S. 767 (1998)...17, 19, 42 Norfolk Southern Corp. v. Oberly, 822 F.2d 388 (3d Cir. 1987)...34 O Connor v. United States, 479 U.S. 27 (1986)...46 Pea Patch Island, In re, 30 F. Cas (Arb. Ct. 1848) (No. 18,311)...2 Pennoyer v. Neff, 95 U.S. 714 (1878)...19

7 viii Poole v. Lessee of Fleeger, 36 U.S. (11 Pet.) 185 (1837)...19 Ray v. Atlantic Richfield Co., 435 U.S. 151 (1978)...35 Rhode Island v. Massachusetts, 37 U.S. (12 Pet.) 657 (1838)...18 Shively v. Bowlby, 152 U.S. 1 (1894)...40 Texas v. New Mexico, 482 U.S. 124 (1987)...19 United States v. Alaska, 521 U.S. 1 (1997)...19 United States v. Cherokee Nation, 480 U.S. 700 (1987)...19 United States v. River Rouge Improvement Co., 269 U.S. 411 (1926)...41 United States v. Stuart, 489 U.S. 353 (1989)...46 United States v. Texas, 162 U.S. 1 (1896)...19 Virginia v. Maryland, 540 U.S. 56 (2003)...23, 24, 43 Weber v. Board of Harbor Comm rs, 85 U.S. (18 Wall.) 57 (1873)...31 Wedding v. Meyler, 192 U.S. 573 (1904)...44 Yates v. City of Milwaukee, 77 U.S. (10 Wall.) 497 (1871)...31 State Bridge over Delaware River v. Trenton City Bridge Co., 13 N.J. Eq. 46, 1860 WL 5184 (N.J. Ch. 1860)...42 Central R.R. Co. v. Mayor of Jersey City, 56 A. 239 (N.J. Sup. Ct. 1903), aff d, 61 A (N.J. 1905), aff d, 209 U.S. 473 (1908)...28, 36 City of Wilmington v. Parcel of Land, 607 A.2d 1163 (Del. 1992)...8

8 ix Coastal Barge Corp. v. Coastal Zone Indus. Control Bd., 492 A.2d 1242 (Del. 1985)...34 Costigan v. Pennsylvania R.R. Co., 23 A. 810 (N.J. Sup. Ct. 1892)...44 Gough v. Bell, 22 N.J.L. 441, 1850 WL 4394 (N.J. Sup. Ct. 1850), aff d, 23 N.J.L. 624, 1852 WL 3448 (N.J. 1852)...31 Harlan & Hollingsworth Co. v. Paschall, 5 Del. Ch. 435, 1882 WL 2713 (1882)...31 Keyport & Middletown Point Steamboat Co. v. Farmers Transp. Co.: 18 N.J. Eq. 13, 1866 WL 88 (N.J. Ch.), aff d, 18 N.J. Eq. 511, 1866 WL 89 (N.J. 1866) N.J. Eq. 511, 1866 WL 89 (N.J. 1866)...41 Lehigh Valley R.R. Co. v. Mutchler, 13 Vroom 461, 1880 WL 7765 (N.J. Sup. Ct. 1880)...28, 42 McCarter v. Hudson County Water Co., 65 A. 489 (N.J. 1906), aff d, 209 U.S. 349 (1908)...31 New York v. Central R.R. Co. of New Jersey, 42 N.Y. 283 (1870)...36 New York, Lake Erie, & W.R.R. Co. v. Hughes, 17 Vroom 67, 1884 WL 7630 (N.J. Sup. Ct. 1884)...28 Obrecht v. National Gypsum Co., 105 N.W.2d 143 (Mich. 1960)...39 Stevens v. Paterson & Newark R.R. Co., 34 N.J.L. 532, 1870 WL 5140 (N.J. 1870)...19 Foreign Penn v. Lord Baltimore, 1 Ves. Sen. 444, 27 E.R (1750)...2

9 x ADMINISTRATIVE DECISIONS Crown Landing LLC, 115 FERC 61,348 (June 20, 2006), petition for review pending, Delaware DNREC v. FERC, No (D.C. Cir.)...14 CONSTITUTION, STATUTES, AND REGULATIONS Federal U.S. Const. art. I, 8, cl. 3 (Commerce Clause)...34 Act of June 28, 1834, ch. 126, 4 Stat. 708 (1834 New Jersey-New York Compact)...1, 28, 35, 36, 42 Act of Jan. 24, 1907, ch. 394, 34 Stat. 858 (1905 Delaware-New Jersey Compact)...passim Coastal Zone Management Act of 1972, 16 U.S.C et seq U.S.C Natural Gas Act, 3(a), 15 U.S.C. 717b(a)...14 State Delaware Coastal Zone Act, Del. Code Ann. tit. 7, 7001 et seq...8, 9, 10, 11, 14, 17, 33, 34, 42, (a) Del. Laws ch. 508 (1986)...9 Revised Code of Delaware, 1874, ch. 1,

10 xi Subaqueous Lands Act, Del. Code Ann. tit. 7, ch Delaware River Basin Water Code (Aug. 14, 2007), available at drbc/regs/watercode_ pdf...29 Maryland Md. Laws ch. 1 (1785 Virginia- Maryland Compact)...23, 24 New Jersey 1821 N.J. Laws p. 6, N.J. Laws ch N.J. Stat. Ann.: 52:28-23 to 52:28-32 (1783 New Jersey- Pennsylvania Compact)...36, 42 52:28-34 to 52:28-45 (1905 Delaware-New Jersey Compact)...46 Pennsylvania 71 Pa. Cons. Stat (1783 New Jersey-Pennsylvania Compact)...36, 42 Virginia 1785 Va. Acts ch. 17 (1785 Virginia-Maryland Compact)...23, 24 ADMINISTRATIVE MATERIALS Delaware River Basin Commission, nj.us/drbc...43 Letter from Robert H. Richards, Delaware Attorney General, to Chairman of the House Judiciary Committee (Jan. 19, 1907)...6

11 xii N.J. Att y Gen.: Formal Op. No. 22 (Nov. 16, 1956)...20 Opinion Concerning Riparian Rights (Mar. 15, 1867)...32, 33 New Jersey Dep t of Envtl. Protection, Options for New Jersey s Developed Coast (Mar. 1979)...11, 13, 46 New Jersey Dep t of Envtl. Protection & National Oceanic and Atmospheric Admin.: New Jersey Coastal Management Program and Final Environmental Impact Statement (Aug. 1980)...11, 12 State of New Jersey Coastal Management Program Bay and Ocean Shore Segment and Final Environmental Impact Statement (Aug. 1978)...11 Opinion No , 1978 Del. Op. Atty. Gen. (Oct. 5, 1978)...9 OTHER MATERIALS Black s Law Dictionary (1891)...20 Complaint, New Jersey v. Delaware, No. 1, Orig. (U.S. filed Mar. 13, 1877)...3, 27 1 Henry P. Farnham, The Law of Waters and Water Rights (1904)...7, 8, 30, 31 Motion of Respondent FERC To Dismiss or Alternatively To Hold in Abeyance Petition for Review, Delaware DNREC v. FERC, No (D.C. Cir. filed Mar. 1, 2007)...34

12 xiii Reply Brief of the State of New Jersey in Opposition to the Exceptions of the State of New York, New Jersey v. New York, No. 120, Orig. (U.S. filed Aug. 29, 1997)...43 Restatement (Second) of Torts (1977)...7, 31 Webster s International Dictionary (1898)...22

13 xv GLOSSARY 1783 Compact N.J. Stat. Ann. 52:28-23 to 52:28-32; 71 Pa. Cons. Stat (1783 New Jersey-Pennsylvania Compact) (DA ) 1785 Compact Md. Laws ch. 1; 1785 Va. Acts ch. 17 (1785 Virginia-Maryland Compact) 1834 Compact Act of June 28, 1834, ch. 126, 4 Stat. 708 (1834 New Jersey-New York Compact) (DA ) 1877 Complaint Complaint, New Jersey v. Delaware, No. 1, Orig. (U.S. filed Mar. 13, 1877) (DA 6-40) 1905 Compact Act of Jan. 24, 1907, ch. 394, 34 Stat. 858 (1905 Delaware-New Jersey Compact) (App., infra, 1a-5a; DA 11-14) BP Cherry Aff. CMP CZMA B.P. p.l.c. Affidavit of Philip Cherry in Support of Delaware on Cross-Motions for Summary Judgment, New Jersey v. Delaware, No. 134, Orig. (U.S. filed Dec. 22, 2006) (DA ) Coastal Management Program Coastal Zone Management Act of 1972, 16 U.S.C et seq.

14 xvi DA Delaware s Appendix on Cross- Motions for Summary Judgment, New Jersey v. Delaware, No. 134, Orig. (U.S. filed Dec. 22, 2006) DCZA Delaware Coastal Zone Act of 1971, Del. Code Ann. tit. 7, 7001 et seq. DE SJ Br. Delaware s Motion for Summary Judgment and Supporting Brief, New Jersey v. Delaware, No. 134, Orig. (U.S. filed Dec. 22, 2006) DE SJ Opp. DE SJ Reply Br. DNREC DRBC Farnham FERC Delaware s Brief in Opposition to New Jersey s Motion for Summary Judgment, New Jersey v. Delaware, No. 134, Orig. (U.S. filed Feb. 1, 2007) Delaware s Reply Brief in Support of Its Motion for Summary Judgment, New Jersey v. Delaware, No. 134, Orig. (U.S. filed Feb. 15, 2007) Delaware Department of Natural Resources and Environmental Control Delaware River Basin Commission Henry P. Farnham, The Law of Waters and Water Rights (1904) Federal Energy Regulatory Commission

15 xvii Hansen Aff. Herr Aff. Hoffecker Rep. LNG Moyer Aff. New Jersey I New Jersey II NJ 1978 CMP Affidavit of R. Peder Hansen in Support of Delaware on Cross-Motions for Summary Judgment, New Jersey v. Delaware, No. 134, Orig. (U.S. filed Dec. 22, 2006) (DA ) Affidavit of Laura M. Herr in Support of Delaware on Cross-Motions for Summary Judgment, New Jersey v. Delaware, No. 134, Orig. (U.S. filed Dec. 22, 2006) (DA ) Expert Report of Carol E. Hoffecker, Ph.D. (dated Nov. 9, 2006) (DA ) Liquefied Natural Gas Affidavit of William Moyer in Support of Delaware on Cross-Motions for Summary Judgment, New Jersey v. Delaware, No. 134, Orig. (U.S. filed Dec. 22, 2006) (DA ) New Jersey v. Delaware, No. 1, Orig. (U.S. filed Mar. 13, 1877) New Jersey v. Delaware, 291 U.S. 361 (1934) State of New Jersey Coastal Management Program Bay and Ocean Shore Segment and Final Environmental Impact Statement (Aug. 1978) (DA ) (excerpt)

16 xviii NJ 1979 Options Report NJ 1980 CMP NJ Reopen App. NJ SJ Br. NJA NJDEP Rep. Reuther Aff. New Jersey Dep t of Envtl. Protection, Options for New Jersey s Developed Coast (Mar. 1979) (excerpt) (DA ) New Jersey Coastal Management Program: Final Environmental Impact Statement (Aug. 1980) (DA ) Appendix to Motion To Reopen and for a Supplemental Decree, Petition, and Brief, New Jersey v. Delaware, No. 11, Orig. (U.S. filed July 28, 2005) New Jersey s Brief in Support of Its Motion for Summary Judgment, New Jersey v. Delaware, No. 134, Orig. (U.S. filed Dec. 22, 2006) Appendix of the State of New Jersey on Motion for Summary Judgment, New Jersey v. Delaware, No. 134, Orig. (U.S. filed Dec. 22, 2006) New Jersey Department of Environmental Protection Report of the Special Master, New Jersey v. Delaware, No. 134, Orig. (Apr. 12, 2007) Affidavit of Kurt Reuther in Support of Delaware on Cross-Motions for Summary Judgment, New Jersey v. Delaware, No. 134, Orig. (U.S. filed Dec. 22, 2006) (DA )

17 xix Sax Rep. Whitney Dep. Expert Report of Professor Joseph L. Sax (dated Nov. 7, 2006) (DA ) Deposition of Steven Whitney, New Jersey v. Delaware, No. 134, Orig. (Oct. 10, 2006) (DA )

18 INTRODUCTION This case concerns Delaware s authority to exercise its police powers within a twelve-mile circle in the Delaware River that this Court conclusively determined to be Delaware s sovereign territory in New Jersey v. Delaware, 291 U.S. 361 (1934) ( New Jersey II ). The Special Master correctly applied two established legal doctrines to interpret the 1905 Compact, each of which supports rejecting New Jersey s exceptions. First, for centuries this Court has recognized the bedrock principle that a State has full sovereignty over its lands up to its boundary line and the corollary that an adjoining State may not grant lands belonging to another State. The Master correctly interpreted Article VIII of the Compact to require an express statement to affect either State s territorial rights. In light of that shared presumption against relinquishment of jurisdictional rights, the Master properly read Article VII, which provides that each State may... continue... to make grants of riparian lands on its own side of the Delaware River, as not expressly conceding sovereignty over lands that Delaware had always claimed, and later conclusively proved, were part of its territory. Second, this Court has long recognized that a private riparian landowner s exercise of riparian rights is generally subordinate to a State s exercise of police powers. Even if the Compact somehow could be read as an express surrender to New Jersey of jurisdiction to make grants of Delaware s submerged lands, Delaware nonetheless has authority to continue to exercise its police powers over activities within its boundary. In its 1834 Compact with New York, New Jersey negotiated an express declaration that it shall have... exclusive jurisdiction over wharves, but the agreed-upon language in the 1905 Compact is quite different, merely giving each State permission to continue to exercise riparian jurisdiction on its own side of the Delaware River at a time when the States could not agree on their territorial limits and jurisdictional rights. The modifier riparian necessarily limits

19 2 the scope of the jurisdiction addressed in Article VII and does not impinge on the fundamental power of Delaware to regulate activities within its boundary. Because the Master s recommendations properly applied those two settled doctrines to the 1905 Compact, they should be adopted by this Court. STATEMENT 1 A. The Long-Running Boundary Dispute For centuries until this Court s definitive resolution of the boundary in 1934, Delaware and New Jersey disputed their Delaware River boundary within an area known as the twelve-mile circle, whose center is the courthouse in New Castle, Delaware. New Jersey II, 291 U.S. at 374. Delaware claimed sovereign title to the waters and submerged lands of the river within the circle to the lowwater mark on the New Jersey shore based on a 1682 grant from the Duke of York to William Penn. New Jersey claimed title to the middle of the channel. See id. at This Court found that Penn had always claimed ownership of the subaqueous soil of the river and that court decisions in prior centuries supported Delaware s claim. See id. at New Jersey I: The fishing dispute In 1872, Delaware arrested New Jersey citizens for fishing in the eastern half of the river without a Delaware license, setting off an interstate dispute over fishing rights that stirred up longstanding disagreements over boundary and jurisdiction. See Rep New Jersey s Governor proclaimed that New Jersey owned the eastern 1 For more on the long history of this dispute, see Report of the Special Master 2-29 ( Rep. ); DE SJ Br. 3-23; DE SJ Opp (Full references to sources and terms for which abbreviated descriptions are provided can be found in the glossary, supra pp. xv-xix.) 2 See New Jersey II, 291 U.S. at (discussing Penn v. Lord Baltimore, 1 Ves. Sen. 444, 27 E.R (1750) (upholding Penn s title)); id. at 373, 377 (discussing In re Pea Patch Island, 30 F. Cas (Arb. Ct. 1848) (No. 18,311) (upholding Delaware s title)).

20 3 half of the river, and Delaware s Governor responded by asserting exclusive jurisdiction over the waters of said river to low water mark, on the eastern side of said river, within the twelve mile circle from New Castle. Rep. 4 (quoting DA ). The commissioners appointed by both States to negotiate an interstate compact were unable to resolve the dispute. See DA ; Rep In 1877, New Jersey filed suit, asking this Court to determine the boundary line and claiming that its part of the riverbed extended from the New Jersey shore thereof to the middle of said river. DA 20 (1877 Complaint). New Jersey also claimed that it had gained sovereignty by prescription and acquiescence, through its licensing of wharves, docks, piers and other structures. DA 36. However, the only practical controversy identified in New Jersey s complaint concerned fishing rights and Delaware s claimed authority to enforce its fishing license requirement. See DA The Court granted New Jersey s motion for a preliminary injunction against Delaware s enforcement of its fishing laws on the eastern half of the river. See DA (Order). By agreement, the case then lay dormant for nearly 25 years. When it filed its Answer in 1901, Delaware specifically asserted title to the submerged lands within the twelvemile circle and claimed that New Jersey could not acquire territory, jurisdiction, rights, [or] privileges unless Congress and the States expressly and formally consented thereto. DA In 1903, the States appointed commissioners to negotiate a compact, which the New Jersey legislature approved. The Delaware legislature rejected it, however, on the grounds that the compact would harm Delaware fishermen and that it was submitted without proper notice, precluding adequate debate and requiring it to be rushed through the house with undue haste. DA ; see Rep At the time that the compact was drafted in February-March 1903, New Jersey had not submitted any evidence. By letter dated January 31, 1903, less than two

21 4 weeks before the commissioners first met to negotiate the compact, one of Delaware s commissioners and counsel in New Jersey I, Attorney General Herbert Ward, advised his Governor that, while proving Delaware s jurisdiction would entail very considerable expense, [t]he very laborious and critical examination of ancient documents... which preceded the preparation of the somewhat voluminous Answer of the State... has greatly strengthened the belief and reliance of counsel for this State upon the justice of her claim. DA While expressing a well grounded hope that the State of Delaware would be ultimately successful in the suit, Ward advised that, if the entire controversy between the two States can be settled out of court in a manner creditable and satisfactory to both States, it would seem the part of good reason to attempt to make such a settlement. DA The record contains no evidence that Delaware ever perceived that it needed to make concessions to New Jersey on its territorial claims to resolve the fishing dispute, and its longheld position on its boundary claim was confirmed by the Court s 1934 decision. After further proceedings, in February 1905, the parties again appointed commissioners, who agreed to a compact identical to that negotiated in 1903 in all respects relevant here. See DA (Hoffecker Rep ); Rep The States approved the Compact in See Rep The 1905 Compact Adopting language from the resolutions appointing the negotiating commissioners, the Preamble to the 1905 Compact declares that the commissioners had been appointed for the purpose of agreeing upon and settling the jurisdiction and territorial limits of the two States and to frame a compact... looking to... the final adjustment of all controversies relating to the boundary line between [the] States. 3 Notwithstanding those ambitious goals, the Articles of the Compact themselves achieved a 3 For the 1905 Compact s text, see App., infra, 1a-5a; Rep., App. B.

22 5 limited resolution of the actual controversies that had caused the litigation fishing rights and the power to make arrests on the river. The first four of the Compact s eight substantive Articles use specific geographic descriptions in addressing certain topics (including criminal jurisdiction and fishing rights) that rendered irrelevant the ultimate location of the boundary, but the next three Articles (V, VI & VII) do not use any specific geographic descriptions at all. Articles I-III went into effect immediately but were subject to further refinement in Articles IV and V. Under Articles I and II, each State could serve criminal process for crimes committed upon the soil of said State or upon the eastern half of said Delaware River for New Jersey and the western half of said Delaware River for Delaware. Article III provides that the inhabitants of both States shall have and enjoy a common right of fishery between low-water marks on each side of the river. Article IV sets forth a process for each State to appoint commissioners to confer for the purpose of drafting uniform laws to regulate the catching and taking of fish in the Delaware River. Those uniform laws, upon adoption, would become the sole laws regulating fishing in the river, and each State would then have and exercise exclusive jurisdiction within said river to arrest, try, and punish its own inhabitants for violation of the concurrent fishing laws. The Compact does not use the term exclusive jurisdiction anywhere else. See Rep Article V provides that the two States current fishing laws not inconsistent with the right of common fishery discussed in Article IV shall continue in force until the enactment of the concurrent fishing laws provided for in Article IV. Article VI provides that nothing in the Compact shall affect the shellfish and oyster industry. This status quo provision ultimately led to New Jersey II s resolving, in Delaware s favor within the twelve-mile circle, a dispute over where Delaware could regulate that industry.

23 6 Article VII provides that [e]ach State may, on its own side of the river, continue to exercise riparian jurisdiction of every kind and nature, and to make grants, leases, and conveyances of riparian lands and rights under the laws of the respective States. No historical evidence appears to exist of any actual dispute presented in the pleadings in New Jersey I that occasioned the drafting of Article VII. See DA (Hoffecker Rep ). Article VIII reserves the States rights: Nothing herein contained shall affect the territorial limits, rights, or jurisdiction of either State of, in, or over the Delaware River, or the ownership of the subaqueous soil thereof, except as herein expressly set forth. And Article IX sets forth the procedures for the Compact s execution, ratification, and binding nature in perpetuity on both States. In 1907, Congress ratified the Compact. See Rep. 13. Its modest scope in resolving outstanding practical difficulties was confirmed in a joint submission for both States, with counsel explaining to this Court that the main purpose of the Compact was to enact a joint code of laws regulating the business of fishing in the Delaware River and Bay. DA The parties told the Court that the Compact is not a settlement of the disputed boundary, but a truce or modus vivendi. Id. 3. New Jersey II In 1929, New Jersey filed a second original action to resolve a dispute concerning oyster beds (which had been left open in Article VI). See Rep In New Jersey II, 4 See also DA 1248 (Letter from DE Att y Gen. Robert H. Richards to Chairman of the House Judiciary Comm. (Jan. 19, 1907)) ( The object and purpose of this Compact was to settle certain matters concerning fisheries which had been the cause of the litigation for years pending in the Supreme Court of the United States between the two States. ). 5 New Jersey s Attorney General explained in a printed report requested by the New Jersey Governor that the suit was also intended to resolve New Jersey s uncertainty over its rights regarding wharves, buildings and other improvements on lands within the twelve-mile circle, and he reported that no agreement has ever been reached

24 7 this Court upheld Delaware s sovereign title to the land, including submerged lands, up to the low-water mark on the New Jersey shore of the Delaware River within the twelve-mile circle. See 291 U.S. at The Court dismissed as wholly without force New Jersey s argument that, in the 1905 Compact, Delaware abandoned its claim to the lands at issue. Id. at 377. The Court held that the Compact provides for the enjoyment of riparian rights, for concurrent jurisdiction in respect of civil and criminal process, and for concurrent rights of fishery. Beyond that it does not go. Id. at (discussing and quoting Article VIII). 7 B. Jurisdiction Over Structures In Delaware 1. Delaware s regulation of riparian uses At the time of the 1905 Compact, owners of riparian lands lands adjacent to waterways had authority to exercise a cluster of property rights called riparian rights, which included the rights to construct wharves extending into an adjacent river, to fish, and to extract water. See Rep (citing Restatement (Second) of Torts 843 (1977)), (describing historic right to wharf out); 1 Henry P. Farnham, The Law of Waters and Water Rights 281, 302 (1904) ( Farnham ). The riparian right to wharf out included reasonable access to and use of the adjacent water, subject to appropriate regulation by the State. Rep. 49 (citing Cummings v. City of Chicago, 188 U.S. 410, 427 (1903); Head v. Amoskeag Mfg. between them except upon the right of citizens of both states to fish in the river and bay. DA 2084, The Court also resolved a dispute (unrelated to the present controversy) over the States boundary south of the twelve-mile circle. The Court upheld New Jersey s claim of sovereign title up to the middle of the navigable channel, thereby giving New Jersey sovereignty over submerged lands with valuable oyster beds. See 291 U.S. at The States immediately disputed under Article VII whether Delaware could tax wharves extending from New Jersey into Delaware. See DA Commissioners appointed in 1935 were unable to resolve that issue. See DA , 2137, 2143,

25 8 Co., 113 U.S. 9, 21 (1885)); see also DE SJ Br Riparian rights were and remain always subordinate to the public rights, and the state may regulate their exercise in the interest of the public. 1 Farnham 284. From the 1700s to 1961, Delaware permissively regulated riparian rights through the common law subject to the State s power to regulate or restrict private riparian property rights for public purposes. City of Wilmington v. Parcel of Land, 607 A.2d 1163, (Del. 1992). In 1961, Delaware enacted its first statute regulating submerged lands, and, in 1966, it adopted a more comprehensive law governing leases of state-owned subaqueous lands. See Rep (describing regulatory history). The small number of piers and wharves built before the new regulatory regime were formally grandfathered, and Delaware required permits for any subsequent modifications or new structures. See id. In 1971, Delaware enacted the Delaware Coastal Zone Act, Del. Code Ann. tit. 7, 7001 et seq. ( DCZA ), prohibiting [h]eavy industry uses of any kind and offshore gas, liquid, or solid bulk product transfer facilities within the coastal zone, id. 7003, which includes land, water [and] subaqueous land between the territorial limits of Delaware in the Delaware River, Delaware Bay and Atlantic Ocean, id. 7002(a). In 1972, Delaware rejected as a prohibited bulk transfer facility an application by the El Paso Eastern Company ( El Paso ) to build a liquefied natural gas ( LNG ) unloading facility extending from New Jersey into Delaware. See DA , , Also in 1972, Congress enacted the Coastal Zone Management Act, 16 U.S.C et seq. ( CZMA ), which permits States to submit coastal zone management programs to the Secretary of Commerce for review and approval, in return for which the States receive federal funding for coastal management. See id Delaware s coastal zone management program, approved in 1979, concludes that there is no site in Delaware suitable

26 9 for the location of any LNG import-export facility. DA That conclusion was consistent with a 1978 formal opinion by Delaware s Attorney General finding that the DCZA would prohibit bulk transfer facilities located in Delaware on a pier originating on the New Jersey shore. See DA (Del. Op. Att y Gen ). Delaware s coastal zone management program also rejected a comment by Salem County, New Jersey, that Delaware law unduly restricts development along the Delaware River in New Jersey, stating that Delaware s jurisdiction extends to the low water mark on the New Jersey shore. Rep. 72 (quoting DA 2600, 2605). Finally, in 1986, Delaware enacted the Subaqueous Lands Act, 65 Del. Laws ch. 508, Del. Code Ann. tit. 7, ch. 72, authorizing its Department of Natural Resources and Environmental Control ( DNREC ) to regulate any potentially polluting use made of Delaware s subaqueous lands and to grant or lease property interests in state submerged lands. See Rep Boundary-straddling structures within the twelve-mile circle The record shows that only 14 wharves and piers have ever extended from the New Jersey shore into Delaware within the twelve-mile circle in the last 155 years. See Rep. 74. Eleven were built before 1969 during Delaware s common-law regulation era, and those structures were treated as grandfathered under Delaware s regulations. See id. Only three of those grandfathered structures arguably extended more than 500 feet from the boundary, the longest being between 600 and 700 feet. See DA (Herr Aff. 28(a), (c), (d)). New Jersey identified only three structures extending past the low-water mark into the twelve-mile circle in See NJ SJ Br. 4-5 & n.4. Since 1969, only three cross-boundary structures have been built, all regulated by Delaware. See Rep First, in 1971, Delaware granted a subaqueous lands lease to E.I. du Pont de Nemours & Co. ( DuPont ) to dredge Delaware submerged soil, build a dock, and construct a fuel oil storage tank at the DuPont Chambers

27 10 Works facility extending from the New Jersey shore. See Rep Second, in 1990 and 1991, Delaware permitted a proposed coal unloading pier by Keystone Cogeneration Systems and issued a DCZA permit and a subaqueous lands lease (and renewals) for the project. See Rep. 75. Third, in 1996, Delaware granted the New Jersey Parks and Forestry Division s own request for a subaqueous lands lease to refurbish a pier at New Jersey s Fort Mott State Park, and in 2006, while this litigation was pending, New Jersey applied to Delaware for a renewal. See Rep In 2005, Delaware also issued a permit to refurbish an existing pier at Penns Grove, but that work apparently has not yet begun. 8 Recent aerial photographs of the twelve-mile circle depict only those four structures. 9 Delaware also has required permits for pipelines and power lines crossing the river within the twelve-mile circle. 10 It regularly responds to police, fire, and other 911 requests on the eastern half of the river, see DA , , , and taxes a cross-boundary project, see NJA 1491a (DE Interrog. Resp. No. 34); DA New Jersey s acknowledgment of Delaware s regulatory authority For at least a half-century, New Jersey has recognized Delaware s authority over the submerged lands within the twelve-mile circle beyond the low-water mark. In a formal Attorney General opinion in 1956, New Jersey conceded that the 1905 Compact gave the State of New Jersey no proprietary rights in the soil within the twelvemile circle, and New Jersey has no ownership in the soil offshore of said low-water mark. NJA 309a, 312a. In 1972, shortly before Delaware denied permission under the DCZA for the El Paso-proposed LNG facility, it 8 See DA ; DA 4327 (Herr Aff. 15). 9 See DA 4207 (Keystone), 4208 (Penns Grove), 4209 (DuPont), 4210 (Fort Mott), (none), (Reuther Aff ). 10 See DA , , , , , 3381, (Columbia Gas, Delmarva Power, and Colonial Pipeline).

28 11 notified the Commissioner of New Jersey s Department of Environmental Protection ( NJDEP ), which raised no objection to Delaware s vetoes of LNG terminals or other cross-boundary projects. See DA In 1979, after a multi-year review process for its own coastal zone management plan and a pledge to develop its position on boundary issues with Delaware through consultation with its Attorney General, 11 New Jersey issued a report, Options for New Jersey s Developed Coast ( 1979 Options Report ), which analyzed Delaware s coastal zone laws and concluded that Delaware may regulate or prohibit a proposed project extending from New Jersey into Delaware. See DA 2455, A separate appendix noted the boundary as determined by this Court and concluded that major development extending into the Delaware River could require approval from the State of Delaware, in addition to approvals from the State of New Jersey. DA The report recognized that the DCZA applied to cross-boundary projects and that some types of activities would be prohibited from locating along the Delaware River in Salem County, while other facilities desiring to locate along the river would need to obtain permit approval from the State of Delaware. Id. (emphases added). The report added that, since the DCZA took effect in 1971, no activity has taken place along the Salem County shoreline which would come under the jurisdiction of the Act. DA 2511; see also Rep New Jersey then developed a 1980 coastal plan that even more clearly recognized that Delaware has the right to exercise regulatory jurisdiction within the twelve-mile circle. Rep. 81. The plan acknowledged that, [i]n most of Salem County, the Delaware-New Jersey State boundary is the mean low water line on the eastern (New Jersey) shore of the Delaware River, and it stated that both 11 See DA 4630 (NJ 1978 CMP) ( [NJDEP] will also work with... the Attorney General of New Jersey... in the next year to resolve boundary issues between New Jersey, Delaware and New York. ).

29 12 States Coastal Management agencies... have concluded that any New Jersey project extending beyond mean low water must obtain coastal permits from both states. DA 2657 (emphasis added). It also decreed that both States would coordinate reviews of any proposed development that would span the interstate boundary to ensure that no development is constructed unless it would be consistent with both state coastal management programs. Id. The 1980 draft New Jersey coastal management plan was widely distributed to thousands of interested parties and was reviewed by New Jersey s Governor, Attorney General, legislators, and state agencies, 12 none of whom disputed that Delaware has regulatory authority over boundary-straddling projects. Only Salem County expressed strong[] oppos[ition] to the statement... that any project in the area must be consistent with both Delaware s and New Jersey s coastal programs and obtain permits from two states, but New Jersey rejected that protest in its 1980 plan. Rep (quoting DA 3135). Finally, in 1989, New Jersey and Delaware amended a 1961 compact concerning public crossings (such as bridges) between the two States that are operated by a bi-state entity created by that compact. See DA (creating the bi-state Delaware River Basin Authority). The 1989 amendment required that any project, other than a crossing, with project defined to include boundarystraddling [t]ransportation facilit[ies]... adapted for public use such as wharves, DA 4434, shall comply with all... coastal zone laws... promulgated by the state in which the project, or any part thereof, is located, DA 4442 (Art. XXII(a)) (emphasis added). New Jersey concedes that, until it filed this lawsuit, it recognized Delaware s authority to regulate cross- 12 See DA 3001 (noting that 3,000 copies were distributed and eight public hearings convened), ( Waterfront Development Rules and Attorney General s Opinion ), 3169 (NJ 1980 CMP), ( Department of Law and Public Safety ); see also DA , 781, 787.

30 13 boundary projects within the twelve-mile circle and has never, before this case, sought to exert exclusive jurisdiction over any structure extending into Delaware. See DA (NJ Interrog. Resp. No. 10). 4. The parties history of cooperation In practice, the States have cooperated over boundarystraddling projects. New Jersey s 1979 Options Report noted that Delaware has agreed to notify Salem County of any proposed activity along the Delaware or Salem County shoreline which is subject to the [DCZA]. DA In return, Delaware has asked Salem County to notify Delaware of any proposed development in Salem County which would fall under [DCZA] jurisdiction. Id. The two States have cooperated on permitting. See Rep ; DE SJ Opp In 1991, New Jersey approved Keystone s permit on the express condition that Keystone first secure Delaware permits. See DA 3554; cf. DA An internal analysis developed by New Jersey for the project acknowledged that Keystone needed a Coastal Zone Permit and a Subaqueous Lands Permit from Delaware. DA A senior NJDEP official testified in deposition that, throughout his 27-year tenure at NJDEP, New Jersey had regulatory authority on the New Jersey side of the boundary and Delaware had regulatory authority on the Delaware side of the boundary and any project that would cross over that boundary would need to get approvals from both states in order for the project to go forward. DA 778 (Whitney Dep.). 13 New Jersey adhered to that position even after filing this suit, by applying in 2006 to Delaware to renew the Fort Mott permit. See Rep. 76. C. The Present Controversy In 2002, BP sought permission from DNREC to construct an LNG unloading terminal named Crown Landing that would extend 2,000 feet into Delaware territory, with associated onshore structures in New Jersey. Con- 13 See also DA 782, 786, 790, 791, 792, , 800, 807.

31 14 struction would require dredging 1.24 million cubic yards of submerged soil, affecting 29 acres of Delaware s riverbed. See Rep Although BP indisputably could build its facility in other parts of New Jersey without encroaching on Delaware s submerged lands including less than two miles upriver of its current preferred site BP nonetheless has insisted on the location at Crown Landing. See DA 4306 (Cherry Aff. 9-10). On February 3, 2005, DNREC determined that the facility was prohibited under the DCZA as an offshore bulk transfer facility and a heavy industry use. Rep. 20. After losing an administrative appeal, BP declined to seek court review. See id. The Federal Energy Regulatory Commission ( FERC ) granted BP s Crown Landing application under 3(a) of the Natural Gas Act, 15 U.S.C. 717b(a), but conditioned its approval on, among other things, BP s filing, prior to construction, documentation of concurrence from the DNREC that the projects are consistent with applicable Delaware law, in conformance with CZMA, as well as satisfying all New Jersey requirements. Crown Landing, LLC, 115 FERC 61,348, 31 (June 20, 2006), petition for review pending, Delaware DNREC v. FERC, No (D.C. Cir.). On January 7, 2005, BP filed an application with the NJDEP s Office of Dredging and Sediment Technology, which notified BP in a letter filed with FERC that its application was deficient under New Jersey law. The letter also informed BP that activities taking place from the mean low water line... outshore are located in the State of Delaware and therefore are subject to Delaware Coastal Zone Management Regulations. DA 4641 (emphasis added). BP representatives met with New Jersey officials and apparently convinced them to reverse New Jersey s decades-long policy of cooperation and acknowledgement of Delaware s regulatory authority over cross-boundary projects. See DA (BP Privilege Log). Internal BP documents show that BP representatives communi-

32 15 cated more than 250 times with New Jersey in regarding New Jersey s pleadings in this case. See id. Although New Jersey has never issued the required New Jersey permits for Crown Landing to be built, it filed this suit invoking the Court s original jurisdiction. The Court appointed Ralph I. Lancaster, Jr., as Special Master, who conducted an intensive nine-month discovery process. See Rep. 27. After the close of discovery, both sides moved for summary judgment. The parties submitted nearly 6,500 pages of historical documents, correspondence, reports, and other materials, which the Master read and digested along with more than 200 pages of briefing. Oral Arg. Tr. 4 (Feb. 22, 2007). The Master heard nearly four hours of oral argument on February 22, 2007, and issued his Report on April 12, 2007, concluding that New Jersey s authority to convey riparian lands stops at the low-water mark on the New Jersey shore. He found that the 1905 Compact preserves for riparian owners on the New Jersey shore their riparian rights, including the right to wharf out into Delaware territory. He concluded that, beyond the low-water mark, New Jersey could not exercise the full extent of its police powers or exercise exclusive jurisdiction, and that, beyond the low-water mark, Delaware, as the sovereign, has overlapping jurisdiction to exercise its full complement of police powers to regulate riparian improvements extending from New Jersey s shore. Rep. 2. The Master reasoned that New Jersey s authority to grant lands is limited by the boundary that this Court established in New Jersey II, because a State may not grant away lands to which it does not hold title. See Rep. 33, By contrast, he reasoned that Article VII of the Compact preserved New Jersey s ability to grant riparian rights appurtenant to its own shore and beyond the boundary, because riparian rights commonly may be exercised on submerged land not owned by the riparian owner. See Rep. 33, The Master concluded, however, that, even if New Jersey had jurisdiction to regulate riparian

33 16 rights associated with improvements extending from the New Jersey shore into Delaware territory, Delaware had police power jurisdiction over such improvements. See Rep That conclusion followed from an examination of this Court s cases and the two States history of regulation. The Master s decree proposes that the State of Delaware may exercise, under its laws, full police power jurisdiction over the construction, maintenance and use of... wharves and other improvements appurtenant to the eastern shore of the Delaware River within the twelve-mile circle insofar as they extend outshore of the low water mark onto its sovereign territory. Rep., App A. SUMMARY OF ARGUMENT I. The Special Master correctly found that New Jersey may not make grants of Delaware s submerged lands. Article VIII of the 1905 Compact codifies the longstanding rule that a sovereign will not be deemed to have granted away such lands unless it does so expressly. This Court has already held that Article VII of that Compact did not give New Jersey territorial rights in Delaware s submerged lands, and Article VIII confirms that interpretation. Article VII does no more than give each State power to grant lands that it owns, and it does not give New Jersey power to grant lands within Delaware s territory. If it did, New Jersey would be able unilaterally to change the interstate boundary set by this Court in 1935 every time it made a riparian grant beyond the low-water mark in the twelve-mile circle. This Court s boundary decision, the historical context, and the structure of the 1905 Compact provide no support for that cession of Delaware s territorial rights to New Jersey. New Jersey relies on an incorrect assumption that the Compact s reference to each State s own side of the river refers to the geographic half of the Delaware River adjacent to each State s shore, a position rejected by this Court when it determined that the relevant dividing line is not the river s geographic middle but the low-water mark on the eastern side.

34 17 II. The Master correctly found that Delaware retains police power jurisdiction within its territory. Riparian rights have always been subject to the sovereign s power to regulate for public safety and welfare. The New Jersey commissioners drafting the 1905 Compact were familiar with that principle, because New Jersey s Attorney General recognized it in an 1867 opinion. In enforcing its Coastal Zone Act, Delaware is lawfully exercising police powers within its sovereign territory. The DCZA is a classic exercise of the power to protect public health, safety, and lands. Moreover, Delaware has an undisputed right to regulate activity on ships within the twelve-mile circle. New Jersey s exceptions lack merit. Riparian jurisdiction, as used in Article VII, neither means exclusive jurisdiction nor confers broader police powers. New Jersey mistakenly argues that enforcement of any law affecting riparian rights constitutes an exercise of riparian jurisdiction, but that argument is not true to precedent distinguishing riparian law from general regulatory law. New Jersey also argues that it would be unworkable for Delaware to have police power jurisdiction over riparian improvements extending from New Jersey, but Delaware and New Jersey have worked together cooperatively to regulate such improvements for decades with no apparent administrability problems. Such overlapping jurisdiction over cross-boundary structures is common, as New Jersey itself asserted (and this Court agreed) in New Jersey v. New York, 523 U.S. 767 (1998). And the States course of conduct since 1905 confirms that Delaware retains sovereignty and police power jurisdiction over riparian improvements located in Delaware s territory. Delaware s regulation of its coastal waters and submerged lands has long encompassed such structures, and New Jersey has consistently submitted to such regulation. New Jersey relies on statements made by Delaware at the time of the Compact, but the cited statements are consistent with Delaware s exercise of its police powers to regulate improvements in Delaware.

35 18 ARGUMENT I. THE MASTER CORRECTLY FOUND THAT NEW JERSEY MAY NOT GRANT DELAWARE LANDS This Court has long recognized the bedrock legal principle that control of submerged lands lies in the hands of the sovereign. The 1905 Compact codifies that foundational tenet in Article VIII, which provides that the Compact will not affect the States territorial rights except as expressly set forth in the Compact. The Master correctly found that Article VII does not contain such an express grant of Delaware lands to New Jersey. Indeed, a contrary holding would override this Court s resolution of the boundary dispute in New Jersey II, which squarely rejected the argument that Article VII gave New Jersey territorial rights over submerged land within the twelvemile circle: We are told that by [the 1905 Compact] the controversy was set at rest and the claim of Delaware abandoned. It is an argument wholly without force. The compact of 1905 provides for the enjoyment of riparian rights, for concurrent jurisdiction in respect of civil and criminal process, and for concurrent rights of fishery. Beyond that it does not go. Nothing herein contained shall affect the territorial limits, rights, or jurisdiction of either State of, in, or over the Delaware River, or the ownership of the subaqueous soil thereof, except as herein expressly set forth. 291 U.S. at (quoting Article VIII). A. The 1905 Compact Codifies The Bedrock Principle That A Sovereign State Has Exclusive Jurisdiction To Grant Its Own Lands This Court has long recognized the fundamental principle that a sovereign State has exclusive jurisdiction to grant and convey its own lands, including submerged lands. See, e.g., Rhode Island v. Massachusetts, 37 U.S. (12 Pet.) 657, 733 (1838) ( [W]hen a place is within the